Sweden’s Economy Is Getting a Lift From Migrants

Hussam Al-Homsi came to Sweden in 2015, along with hundreds of thousands of refugees fleeingunimaginable horrors in the Syrian war. Three years on, he finds himself part of a demographic group that’s at the center of the biggest shock to Sweden’s political establishment in a century.

The country of about 10 million people will hold national elections on Sept. 9, and polls show that immigration is among the most important issues to voters right now—if not the most important. The Sweden Democrats, a nationalist party that advocates much tougher controls on the number of migrants allowed in each year, appears poised to capture the largest number of seats in the legislature.

Lost amid the political rhetoric is the story of the bounce that people such as Al-Homsi have delivered to the $540 billion economy. Sweden’s rapid intake of huge numbers of refugees and migrants, about 600,000 in total over the past five years, has produced some of the highest growth rates in Europe and will also help it address the challenges of an otherwise aging population.

“These refugees and immigrants came at precisely the right time,” says Lars Christensen, an economist and founder of Markets & Money Advisory, a consulting firm. “I’m worried about the lack of incentives [to work] in the Swedish welfare state, but I’m not worried about the 250,000 refugees that have arrived.”

Gross domestic product increased more than 3 percent in the first two quarters of the year, which is considerably faster than the euro zone’s roughly 2 percent growth. In recent years, Sweden has granted thousands of work permits to information technology developers, berry pickers, and cooks. Foreign-born workers accounted for all the job growth in the industrial sector last year and for 90 percent of the new jobs in the welfare sector, in particular health care and elderly care.

Finance Minister Magdalena Andersson on Aug. 16 said the new arrivals are now getting jobs twice as fast as immigrants who arrived late in the last decade. Immigrants in Sweden have a labor force participation rate of about 82 percent, some 4 percentage points higher than the EU average.

Still, Sweden’s labor market has had a tough time absorbing such a large inflow of people, even with more than 100,000 job vacancies. Unemployment among the foreign-born is 20 percent, compared with 6.8 percent overall.

The Sweden Democrats want the country to stop accepting asylum-seekers. They argue that the increase in foreigners threatens to drain the welfare system and destroy the nation’s social cohesion. The party is set to win support from more than 20 percent of voters, depriving the two mainstream blocs of the 50 percent needed to form a solid government, most polls show.

Jimmie Akesson, party leader of the Sweden Democrats, campaigns in Sundsvall on Aug. 17.

PHOTOGRAPHER: MATS ANDERSSON/GETTY IMAGES

As recently as 2014, former Prime Minister Fredrik Reinfeldt urged Swedes to “open their hearts” to immigrants. But the large influx in recent years has strained Swedes’ sense of hospitality. Local media regularly link crime to increasing numbers of foreigners, portraying migrants as a burden on the taxpayer. And while the Sweden Democrats have made immigration a central theme of their platform, all main parties support the idea of imposing curbs.

A recent report from the Expert Group on Public Economics, an independent committee within the Finance Ministry, added fuel to the fire by estimating the net cost to public finances from the most recent refugees to be 74,000 kronor ($8,000) per person annually over a lifetime. Joakim Ruist, the author of the report, argues that refugees rarely have the right education or skills to match the needs of Swedish employers.

Al-Homsi has an MBA, a background in equities and real estate, and a career that has already taken him to Dubai, Kuala Lumpur, Moscow, and Nigeria. As soon as he was granted asylum, he sent off more than 300 job applications. He got one interview offer: for an unpaid internship at Microsoft Corp. “It was then that reality hit me,” he says.

The Royal Institute of Technology in Stockholm runs a software development academy for new arrivals. The program, financed by the Wallenbergfamily foundations, includes 500 hours of Java coding over three months. So far about 80 have completed the training. “What’s missing in the debate is that the absolute majority of the newly arrived want to find work more than anything,” says Farzad Golchin, founder and chief executive officer of Novare Potential, a recruiting company that oversees the selection of candidates for the project. “There’s enormous frustration in this group.”

Ismaiel Alkadro, 34, a vascular surgeon from the Syrian town of Raqqa, now works at a hospital in Eskilstuna, about a 90-minute drive from Stockholm. Alkadro, who arrived in Sweden in 2014, uses social media to track the plight of other highly educated professionals from his country who are struggling to find work. “I know of a doctor who has started a pizzeria,” he says, “another one who is working in elderly care.”

To get to Sweden, Alkadro traveled for four months by foot and boat, spending winter nights outside. After making it through a 10-month asylum process, he spent a year studying Swedish and preparing for a test to get his local medical license. He got three job offers after filing more than 100 applications.

“Employers are careful to call a person with a foreign name to an interview,” he says. “But one can’t give up.”

Author: Rafaela Lindeberg This article Orignally appeared on Bloomberg